Correlation Between Kellanova and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Kellanova and Kraft Heinz at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kellanova and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and Kraft Heinz Co, you can compare the effects of market volatilities on Kellanova and Kraft Heinz and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kellanova with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and Kraft Heinz.
Diversification Opportunities for Kellanova and Kraft Heinz
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kellanova and Kraft is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Kellanova is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kellanova are associated (or correlated) with Kraft Heinz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Heinz has no effect on the direction of Kellanova i.e., Kellanova and Kraft Heinz go up and down completely randomly.
Pair Corralation between Kellanova and Kraft Heinz
Taking into account the 90-day investment horizon Kellanova is expected to under-perform the Kraft Heinz. In addition to that, Kellanova is 1.09 times more volatile than Kraft Heinz Co. It trades about -0.03 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about 0.01 per unit of volatility. If you would invest 3,701 in Kraft Heinz Co on January 19, 2024 and sell it today you would earn a total of 10.00 from holding Kraft Heinz Co or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellanova vs. Kraft Heinz Co
Performance |
| Timeline |
| Kellanova |
| Kraft Heinz |
Kellanova and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and Kraft Heinz
The main advantage of trading using opposite Kellanova and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, Kraft Heinz can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kraft Heinz will offset losses from the drop in Kraft Heinz's long position.| Kellanova vs. Central Garden Pet | Kellanova vs. Central Garden Pet | Kellanova vs. The A2 Milk | Kellanova vs. Altavoz Entertainment |
| Kraft Heinz vs. Central Garden Pet | Kraft Heinz vs. Central Garden Pet | Kraft Heinz vs. The A2 Milk | Kraft Heinz vs. Altavoz Entertainment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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